Some of the pitfalls of becoming a classic car dealer.
About 5 years ago at the humble age of 22 I had decided that the rat race had become too much for me. I had not only the pressure of working a full 8 hours each day, but the added pressure of having to head down to the pub every now and then combined with having to wash and iron my own clothes. Times were tough and I realised I needed to duck away from all this responsibility. I needed to get rich quickly to get out of this murky world of real work and my first plan, of buying lots of lottery tickets, had failed woefully. The next issue that came up was that I had no discernable talents. This meant that I couldn’t be a pop star or an actor. I suppose I could have applied for The Apprentice but Amstrads bore me at the best of times so that seemed a poor idea. Fortunately because I hadn’t had many girlfriends/friends growing up, I knew a surprising amount about classic cars, even if I had no idea how to repair them. Armed with £4000 to set myself up I decided to start a ‘classic car business’. I had quit work, was sleeping back at my parents and was living on a diet of Coco Pops and Pot Noodles. However none of this mattered as I was about to make millions in the classic car business. I had read an article about how this guy had bought something on E-bay for £5 and then by trading up ended up with a house. I had £4000 so I was pretty certain I was going to end up owning Bill Gates. I decided to start with something I knew very well which was obviously a Mini. For £3000 I bought a Mini Cooper Sportspack with only 12,000 miles on the clock which needed a ‘small’ amount of cosmetic work, which I reckoned would cost about £500. Then with the right marketing I’d sell it for £6k meaning I’d be able to buy a much better second car. Unfortunately I have a tendency of getting too excited and of using my rose tinted goggles a little too often. I had failed to notice the following: - Hole in the boot floor which had tape over it. - Service history virtually missing for 3 years and an MOT that said 48,000 miles. - Front sub-frame that had been put on at an angle. I had to visit the bank of Dad for the £2,000 it eventually cost to get the car properly sorted. I sold the car for £4,000 in the end after 3 months trying, losing £1000 and countless man hours trying to sell it. Shortly after this I re-entered the world of work and since then I have not even attempted to buy or sell a classic car with the intention of making a profit. There is a big difference between being able to geek out the stats on a series 1 E-type and knowing enough about that model to spot a dud when looking to buy one. In addition you also need to be able to appreciate the cars without getting too emotionally attached to them which I’ve never proven capable of doing. There are two reasons why I have decided to relay yet another dull anecdote from my rather tedious existence this week. Firstly I got an e-mail from someone wanting to know whether I thought he should set up on his own as a classic car dealer. In all honesty unless you have some mechanical skills, have a lot of knowledge about the cars you want to sell, can be pragmatic when required and have a good level of financial support don’t even think about it. I know the odd back-yard mechanics that supplement their income, by doing up a car then selling it on, but not very many who can do this full time and make money out of it. Operating profits are small and competition to buy good stock is vast. Without a reputation it is a very difficult market to break. My second reason for bringing this up this week was an e-mail I had from some chap moaning that all classic car dealers are pr*cks and they would sell their soul for a pack of peanut M&Ms (He didn’t actually say the peanut M&M thing but I thought it helped set the scene). I can say quite comfortably in the last 2 years I have spoken to at least 1,000 different classic car dealers from all over the world. Of those 1,000, I can remember only 7 that I really didn’t like. That is less than 1% of classic car dealers I don’t like. And let’s be honest, if you’ve read my weekly updates before, you’ll know there aren’t many people I do like. Compare this statistic with recruitment consultants where research* shows 98% contain no human soul and estate agents who don’t eat food because they can survive on pure ego. Classic car dealers do it because they are passionate about classic cars. They are usually highly intelligent people with many other interests who actually have opinions about things. Most take pride in what they do and the cars they sell and they love to chat about it. Honestly, if you want to get the price down on a classic car you want to buy from a dealer. Try to out-chat one, I don’t fancy your chances. This brings me to the moral of today’s story. Selling classic cars is actually quite hard and unless you’re doing so with very high end vehicles it is not vastly profitable. Classic car dealers get some flak and I’ve seen things in the press with court cases where classic car dealers have been involved and usually the plaintiff looks like the wronged party. For legal reasons I would never comment on an individual case but there have been times where you can see the dealer being sued didn’t realise the mistake himself or was just a passionate old chap putting his car in the best possible light. The loss of reputation to any car dealer after something like this is hugely damaging. So next time you think about pigeon holing classic dealers alongside normal car dealers, remember; these people keep the classic car sector ticking and usually do it because of passion rather than money. Phil Cooper philcooper@classiccarsforsale.co.uk * For legal reason I have to point out that I haven’t actually done any research into whether recruitment consultants actually have a soul. It does seem doubtful however